MULTICULTURAL AND TRANSNATIONAL MANAGEMENT Nestle analyze When entering international markets, MNCs will typically need to adapt their managerial approaches to meet local features. Based on the knowledge learned in this subject, please provide three examples to support this claim: FedEx, Starbucks, Holley Group Analyze Nestles management activities in transnational environment
Table of content PART 1: ESSAY (3 points) Example 1: Human resource management in FedEx Example 2: Leadership style of Starbucks in China and the US Example 3: Leadership style of Holley Group in China and Thailand PART 2: SITUATION ANALYSIS (5 points) 10 Company history introduction 10 Based on the content covered in the course, give examples of how MNCs have performed management activities in a multicultural environment 11 2.1 Cross Cultural Communication 11 2.2 Cross Cultural Motivation 13 2.3 Cross-Cultural Decision Making 14 2.4 Cross-Cultural Leadership 15 2.5 Human Resources Management 16 Analyze the advantages and disadvantages of managing a diverse and multicultural workforce in MNC 17 3.1 Advantages of managing a diverse and multicultural workforce: 17 3.2 Disadvantages of managing a diverse and multicultural workforce: 18 On reflection, what advice would you give to that MNC to make the best of its diverse workforce? 20 PART COURSE RESPONSE (2 points) 21 What are your expectations about your academic performance in this course? Learning outcomes 21 How successful have you been in achieving the expected learning outcomes? 21 How does your team organize group assignments? 22 What about consulting? Lecturers? 24 Do you have any suggestions for the lecturer? If yes, please specify 24 REFERENCES 25 PART 1: ESSAY (3 points) Topic: When entering international markets, MNCs will typically need to adapt their managerial approaches to meet local features Based on the knowledge learned in this subject, please provide three examples to support this claim Example 1: Human resource management in FedEx FedEx Corporation, formerly Federal Express Corporation and later FDX Corporation, is an American multinational conglomerate holding company focused on transportation, e-commerce and business services based in Memphis, Tennessee The name "FedEx" is a syllabic abbreviation of the name of the company's original air division, Federal Express, which was used from 1973 until 2000 FedEx today is best known for its air delivery service, FedEx Express, which was one of the first major shipping companies to offer overnight delivery as a flagship service Since then, FedEx also started FedEx Ground, FedEx Office (originally known as Kinko's), FedEx Supply Chain, FedEx Freight, and various other services across multiple subsidiaries, often meant to respond to its main competitor, UPS The company is the fifth largest American-headquartered employer globally with 547,000 employees, and FedEx is also one of the top contractors of the US government and assists in the transport of some United States Postal Service packages through their Air Cargo Network contract As the world's leader, the corporation has a variety of problems when trading with foreign nations, the most significant of which is cultural FedEx also had a number of cross-cultural hurdles in order to establish itself and earn the loyalty of its clients, as FedEx is a US-based firm and the UAE is an Islamic country, therefore, there is a significant cultural divide between FedEx's home nation and FedEx's host country The official religion of the United Arab Emirates, Islam, encompasses all aspects of life in the country Disrespectful feelings toward Islam are a serious and severe violation in the country The most essential concept in the UAE is hierarchy, which focuses on a top-down approach with all decisions, powers, and authorities centered in one person Such cross-cultural issues as those faced by FedEx in the UAE can have an impact on the company's worldwide business in the host country, since they directly affect the work environment, organizational culture, and marketing strategy Because FedEx is in the express industry, it must contact directly with local UAE consumers Managing the cultural influence of direct marketing and interactions with consumers, as well as other stakeholders, is a challenge for the organization Religion, language, working styles, women in the workplace, behavior, attitude, and appearances are all examples of cross-cultural problems These factors have a significant influence on organizational culture as well as customer satisfaction and loyalty, as local nationals choose businesses in which they feel a sense of belonging and trust, and the most culturally connected organization is able to reach an increasing number of local customers FedEx must attract UAE nationals and employ local Emiratis within the host country in order to comply with the UAE's Emiritization strategy and lower operational costs Example 2: Leadership style of Starbucks in China and the US Starbucks is a famous coffee brand in the world Starbucks coffee company is headquartered in Seattle, Washington, USA In addition, the airline has 17,800 stores in 49 countries, including 11,068 stores in the United States, nearly 1,000 in Canada, and more than 800 in Japan The first Starbucks coffee shop was established at 2000 Western Avenue (Seattle, Washington) on March 30, 1971 Source: The internet Starbucks is a global coffee chain that has adapted its management approach to accommodate local cultural differences Starbucks mainly uses a democratic leadership style (Also called: Participative leadership style) This leadership style is the most appropriate because it encourages participation Democratic leadership makes team members feel more important by fostering feelings of inclusion and environment Naturally, this applies to headquarters in the United States Schultz - the founder of Starbucks has given employees more power in decision making and flexibility in choosing their working hours He respects feedback from employees at Starbucks In China, however, Starbucks has a more centralized organizational structure, with more control from the regional headquarters This is because the Chinese market is more complex and requires more control from the regional headquarters to ensure consistency and compliance with local regulations Furthermore, the most effective and common leadership style in China is Authoritarian leadership Example 3: Leadership style of Holley Group in China and Thailand Source: www.holley.cn Holley Group, founded on September 28th, 1970, is a multi-industry corporation with Holley Worldwide Holdings, which is the parent company and its core business focused on pharmaceuticals Holley has also been involved in various businesses beside pharmaceuticals, such as power metering instruments and power automation systems, wireless and wide-band telecommunications, electronic materials, real estate, agriculture, petrochemical and mining etc Established in the year of 2000, Holley Group Electric (Thailand) Co., Ltd., as a subsidiary company of Holley group, is a professional meter manufacturer in Thailand, working as headquarter in Southeast Asia Holley Group has its own head office in Bangkok, but its factory area is around 8400 sqm in AMATA industrial zone, located in Chonburi, Thailand When they first came to Thailand, Holley's managers and technical staff were all Chinese, they could not communicate in Thai Meanwhile, the company's employees are mostly Thai, so they don't understand Chinese, so Chinese managers and Thai employees cannot communicate with each other People work in an environment of ignorance, mutual suspicion, due to lack of understanding of Thailand's political, economic, cultural and legal situation, the senior manager from China can't manage employees in an orderly manner, the company's efficiency is very low, and the products also have some quality problems Not many customers were willing to accept Holley's product at first Differences in the styles and working habits of Thai employees force Chinese managers to change their leadership style Holley used the basic accommodation model in this case The main reason is that most of the company's employees are Thai, the Chinese manager is a newcomer, and Chinese culture is a new culture here, so it's clearly not possible for Chinese culture to overwhelm Thai culture And more than that, using Thai culture in management can reduce the grievances of local workers First, they implement a localization strategy by recruiting host country nationals All technical staff have been sent back to China to focus on research and development in China Only one general manager and one financial supervisor remain in Thailand, the rest of the employees who are promoted are Thai, and all middle managers are Thai Implementing localization brings many benefits, such as reducing language misunderstandings, which can reduce cultural conflicts between Chinese managers and local workers This strategy not only balances people's psychology but also easily retains local workers, and communicates with local authorities much easier As a result, this strategy has worked Thai workers feel less pressured and they work more efficiently, watt-hour products have also been approved by the Thai government Second, to encourage employee participation, Holley has implemented a full attendance bonus system The full attendance bonus is a worker's evaluation within months, if the worker does not miss a day, can get around 1,000 Baht incentive per month; and if they attend fully every year, the reward will be increased to 5,000 Baht The reason for placing the full attendance award is also due to consideration of Thailand's cultural background If Chinese workers work very hard, efficiently, willing to work overtime, because they can get free dinner and some extra money, but Thai people are not like that Chinese workers not apply for leave, they can be rewarded with one month of diligence, but Thai workers often ask for leave to attend friends' birthday parties, weddings, funerals and other Buddhist activities PART 2: SITUATION ANALYSIS (5 points) In this assignment, you must rely on lectures and tutorials on managing a diverse and multicultural workforce Company history introduction Nestlé was founded in 1866 by Henri Nestlé and is today the largest food and beverage company in the world Nestlé employs approximately 250,000 people from more than 70 countries and has factories or operations in almost every country in the world Nestlé's history began in Switzerland in 1867 when pharmacist Henri Nestlé launched Farine Lactée Nestlé, a nutritious porridge for children Henri used his surname, which means 'small nest', in both the company name and logo Home, symbolizing security, family, and nurturing, remains central to Nestlé's profile Source: The internet Since its inception more than 130 years ago, Nestlé's success with product innovations and business acquisitions has made it the largest Food Company in the world Over the years, the Nestlé family has grown to include chocolates, soups, coffee, cereals, frozen products, yogurt, mineral water, and other food products Starting in the 1970s, Nestlé has continued to expand its product portfolio to include pet food, pharmaceuticals, and even cosmetics Today, Nestlé markets a wide variety of products, all of which have one thing in common: the high quality that has made Nestlé famous around the world Today, dairy food processing is still the main activity of the company, alongside other Nestle family products such as chocolates, instant milk drinks, cuisine, frozen foods, ice cream, dairy products and baby food Nestle is still primarily interested in the nutrition sector, but it has also been interested in the pharmaceutical and cosmetic industries Thanks to the company's initiative and bold work, it has grown into a huge organization, with almost 500 factories worldwide Nestle products are now widely distributed on all continents and sold in more than 100 countries Based on the content covered in the course, give examples of how MNCs have performed management activities in a multicultural environment 2.1 Cross Cultural Communication From Nestle's cross-cultural communication, we can learn something about the important connection between communication in a large multicultural company and the ability to understand each culture Indeed, as businesses become more and more cross-cultural, mainly thanks to factors of globalization, it is important for companies to reflect on their ability to adapt to a global understanding of foreign cultures, from an internal and even an external point of view Indeed, if a company has several subsidiaries abroad, like Nestlé, it is important to understand that each culture has its own way of operating to bring out the best in the company It is important to note that the goal of the senior management team is to ensure that they understand and are understood across cultural boundaries So the company has come up with some guidelines: Giving Written Instructions In the case of Nestlé, people see the importance of taking notes to better communicate information Furthermore, even if the company never compels its subsidiaries to follow the instructions in the letter, it is essential to provide a guideline that is concretized with written instructions Based on these guidelines, subsidiaries will then be able to tailor it to their own needs and cultural factors Making Sure People Understand As a result, a number of Nestlé companies have set up special programs for people who for one reason or another have missed out on a large portion of primary school In South Africa, for example, under the apartheid apartheid regime, many people were severely deprived of primary education These people, in turn, make up a significant proportion of the older employees at Nestlé factories today A special remedial programme has been designed and put in place for them: ABET Adult Based Education Training (The Nestlé People Development Review (2003)) Benefiting From A Multicultural Top Management Team Nestlé creates a top management team by putting people from different countries first at its headquarters in Switzerland Indeed, its “Group Management” then consisted of two Austrians, one Spaniard, one Swiss, one Mexican, two Americans, one British, and one Swede 10 Be Flexible, Tolerant And Aware Of Cultural Taboos As seen in the case of Nestlé and following the idea of providing written instructions, it is very important to adopt a flexible way of thinking, tailored to the needs of each subsidiary The concept of tolerance is key in intercultural communication: it's not just about respecting one's beliefs, but also being tolerant of practices and methods that vary from country to country At the same time, being aware of cultural taboos is essential to avoid communication problems between the company and its subsidiaries In the case of Nestlé, the Director of Human Resources in each country decides how and how to disseminate the “Principles” Encouraging Interaction It is also an essential thing to encourage interaction within the company At Nestlé, the establishment of the International Training and Conference Centre has been following this objective of giving employees the possibility to express themselves about the way to apply processes and also to interact between each other to better share knowledge of ways of doing things 2.2 Cross Cultural Motivation Nestle operates in 130 countries They manufacture about 10,000 different products and employ nearly 250,000 people globally As a leader in Nutrition, Health and Wellness, the name Nestlé is instantly recognizable But what excites new employees and retains existing employees is not only their name but the motivation for employees such as salary, bonus, benefits, health care, Most Vietnamese belong to physiology and safety in the Maslow Theory In general, Nestlé Vietnam has met these needs quite well In addition, the company also has many other benefits such as free use of 11 nutritional products at the factory, buying Nestle products at a more favorable price than the market, and using the company's transportation All these policies are aimed at work-life balance Besides, every year, apart from public holidays and New Year, each employee has a number of Nestlé leave days equivalent to working weeks In particular, Nestlé also has a maternity policy with at least 14 weeks of paid maternity leave and the right to extend the leave up to months This policy helps protect employees' jobs, does not discriminate, protects health, provides flexible work options, and supports breastfeeding Most Japanese belong to love/belonging, esteem and self-actualization in the Maslow Theory In Nestle Japan, some awards are created: Winning Passion Award: This quarterly award is institutionalized to award employees who exceed their goals Long-service Awards: To recognize employees who have been with the company for more than 30 years Nestle Ideas Award'- To recognize and award employees who come up with innovative and relevant ideas that have the potential to be implemented at Nestlé At Nestle, the way management treats people is respect and trust There is no room for intolerance, harassment or discrimination of any kind as they are manifestations of fundamental disrespect This principle is without exception and applies at all levels and in all circumstances 2.3 Cross-Cultural Decision Making Nestlé is a decentralized organization Responsibility for operating decisions is delegated to local units, which often have a high degree of autonomy over decisions related to pricing, distribution, marketing, and 12 human resources At the same time, the company is organized into seven global strategies, business units (SBUs) responsible for high-level strategic decisions and business development For example, a strategic business unit focused on coffee and beverages Others focus on confectionery and ice cream Nestle Corporation produces some of the finest instant milk formulas in the world It is an international company with excellent products, excellent marketing skills and a code of ethics As it sells infant formula worldwide, Nestle has had success in several markets including Europe, North America and Asia In particular, in Singapore, it claims to have saved the lives of thousands of babies whose mothers could not breastfeed So Nestle began marketing infant formula in East Africa, using general marketing principles that had been successful in several markets before As a result, hundreds of thousands of infants have died as a direct result of breastfeeding In this new environment, Nestle did not take into account the new context, where most customers could not read the instructions on the recipe labels, where there was no clean water to make formula and where poverty levels were too high causing mothers to over-dilute the formula, thereby causing their children to starve Nestle has been heavily criticized for this decision, and its practices have been condemned by the WHO This can be seen as a wrong move of Nestle when it did not understand the market well, especially for an unstable and complicated region like Africa 2.4 Cross-Cultural Leadership Nestle has the slogan "Our difference makes us stronger" The company believes that unique people with unique backgrounds bring their unique perspectives and experiences with them At Nestle, the voices of individuals 13 from all backgrounds are not only heard but also appreciated The company's goal is to attract the best workforce from a variety of backgrounds and retain them The company believes that these employees can create products that are loved by customers around the world Having a workforce as diverse as Nestle benefits not only the company but also its employees and the society of which they are members 2.5 Human Resources Management ● Recruitment policy Nestle has its own recruitment system called "The Diversity Leaders Symposium of the Future", through which it recruits and selects employees from different backgrounds In addition, Nestle is also actively involved in various MBA recruitment programs including the Consortium for Graduate Studies in Management Oriented Programs (CGSM OP) Through these selection programs, new university graduates are selected on the basis of merit without considering their background or race The purpose of creating all these associations and organizations is to bring together employees from various backgrounds on one platform where they can share their experiences on how to make the company a great place to work better jobs (Nestle USA, 2015) ● Nestle’s Training Programs Admittedly the company culture is 'learning' All employees strive to continuously improve their skills and knowledge, so employees are willing to learn to be employed by Nestle Standardized management training programs are designed to enhance related skills and competencies In addition, these programs carry out personal development The director of Nestle measures the achievable progress of training programs The purpose behind this is to motivate employees by 14 offering attractive yet realistic careers that help them develop their skills over a long period of time in real economic and changing environments Apprenticeship programs have been an essential part of Nestlé's training since the company was founded in 1867 In addition to running its own apprenticeship programs, in 1959 Nestlé was one of the founding members of Swisscontact, an NGO dedicated to training people in developing countries Since its inception, Swisscontact has trained about 200 000 students and a total of more than 700 000 people Analyze the advantages and disadvantages of managing a diverse and multicultural workforce in MNC The world is becoming more diverse and most large companies are multicultural Diversity definitely has brought new importance to the workplace “More organizational leaders are trying to overcome the challenges of managing a multicultural workforce so that they can reap the benefits A multicultural workforce consists of employees with a wide range of backgrounds Age, race, national origin, gender, and marital status are just some of the traits that distinguish employees culturally.” (Kokemuller, 2012) When people of various cultures work together, the results are usually great 3.1 Advantages of managing a diverse and multicultural workforce: ● Employees from different cultures can bring different perspectives and experiences, increasing creativity and innovation People from different cultures see the world in different ways They are raised to have different priorities, different beliefs in what is possible and appropriate, and they learn different methods of getting things done They are often able to generate more unique solutions and proposals That's a big advantage when an international manager needs some breakthrough thinking for the latest project 15 Nestlé's Research and Development Organization is the largest organization in the food and beverage industry They have more than 4,100 employees working in 23 locations worldwide (Nestle.com) ● Penetrate into diverse markets A cross-cultural workforce can help Nestle expand into geographic and demographic regions that may not be familiar to your company For example, workers from other cultures have a deep knowledge of the foods people like, the music they listen to, and even the styles and colors of clothing they find most acceptable This is important knowledge that can be used effectively in marketing your products to new groups of consumers ● Enhanced reputation A commitment to diversity and inclusion can help MNCs build a positive reputation and increase brand loyalty This can be particularly valuable in today's global market, where consumers and other stakeholders are increasingly interested in social responsibility and ethical business practices ● Improve customer service: A diverse and multicultural workforce can help organizations better understand and serve customers from different cultures, leading to increased customer loyalty and satisfaction It is generally assumed that anyone will have better insight and connections with others of the same nationality or cultural background, leading to building trust and understanding of each other's interests faster 3.2 Disadvantages of managing a diverse and multicultural workforce: Having a culturally diverse workforce can also result in several disadvantages for organizations ● Prevent group thinking 16 When groupthink occurs, group participants come to believe that their ideas and actions are correct and that those who disagree with them are either uninformed or deliberately trying to sabotage their efforts Multicultural diverse groups are often able to avoid this problem because the members not think similarly or feel pressure to conform ● Facing negative stereotypes or cultural stereotypes Negative cultural stereotypes can be seriously detrimental to company morale and affect productivity For instance, centuries-old animosity between the British and the French, or the Koreans and the Japanese, can sometimes creep into the workplace ● Controversy in decision making because of many ideas Diversity in the workplace can create too many opinions Alder (2008) stated that overgeneralization and ethnocentrism is the cause of many culturally specific disadvantages Different perspectives create unique opinions and approaches to life that can create severe disagreements in the workplace So it is very hard to get all consensus from team members, which leads to conflicts and arguments in making the final decision ● Different Styles of Collaborations Different cultures have very different styles of cooperation Many Asian and Central American cultures appreciate developing group consensus before moving forward American culture places more emphasis on individual thoughts and actions Nestle's management team consists of 13 people from more than 10 different nationalities, so it is sometimes difficult to reach consensus ● Organizational Culture Obstacles While global companies can certainly have a positive culture, building shared values becomes much more challenging with a workforce spread 17 across multiple countries People's backgrounds often influence their values The U.S tends to have a strong time orientation, but Latin cultures often promote relationships and flexibility over time orientation Such differences can create conflicts among workers and make it difficult for human resources to implement effective culture-building systems On reflection, what advice would you give to that MNC to make the best of its diverse workforce? Firstly, the company should continue to promote and expand its global business model Second, develop an equal treatment policy for employees regardless of nationality Thirdly, provide cross-cultural training Offer training sessions to help employees understand different cultures, customs, and communication styles This can help avoid misunderstandings and build stronger relationships among team members Cross-cultural training can include workshops, seminars, or online courses The fourth is, leverage the strengths of each team member Each team member brings unique skills and experiences to the table To make the most of a multicultural workforce, it's important to identify and leverage the strengths of each team member This can be achieved by assigning tasks that align with their strengths, providing opportunities for skill development, and encouraging cross-functional collaboration 18 REFERENCES Nestle S.A, 2003, “The Nestlé People Development Review” https://www.nestle.com/sites/default/files/asset-library/documents/library /documents/people/people-development-review-en.pdf ( accessed July 19, 2023) Renliang, L , 2017, “Cross-cultural Management: Case Study of Holley Electric Group (Thailand) Co., Ltd” NIDA Case Research Journal, Vol 9(2), 1-13 Himanshu Sood, 2021, “A Study on Cross - Cultural Management Strategies Followed by MNCs across the Globe”, International Journal of Research Publication and Reviews, Vol 2(8) , 1247-1261 Braden Becker, 2022, “Leadership Styles: The 11 Most Common & How to Find Your Style” (accessed July 19, 2023) https://blog.hubspot.com/marketing/leadership-styles#:~:text=A%20lea dership%20style%20refers%20to,well%2Dbeing%20of%20their%20te am Klagge, J (2013) Advantages and disadvantages of cultural diversity in the workplace DOI, 10, 1-5 Katie Reynolds, 2018, “13 benefits and challenges of cultural diversity in the workplace.” (accessed July 19, 2023) https://www.hult.edu/blog/benefits-challenges-cultural-diversity-workpl ace/ Nestle USA, 2015, “Diversity” (accessed July 20, 2023) http://careers.nestleusa.com/diversity 19 Nestlé: Global Strategy, https://www.transtutors.com/questions/nestl-global-strategy-780522.ht m UKEssays (November 2018) Starbucks Motivation Strategy: Case Study (accessed July 20, 2023 ) https://www.ukessays.com/essays/business/strategies-of-motivation-and -team-performance-at-starbucks-business-essay.php?vref=1 10 Mohamad Wafiuddin Bin Bohari, “Cross Cultural Management in Nestlé”, Overblog, (accessed July 21, 2023) http://epygas.over-blog.com/cross-cultural-management-in-nestle.html# top 11 https://www.nestle.com/ 12 https://www.fedex.com/en-vn/home.html 20